Operations Intelligence: A Loose Link

Too few manufacturers are tying operations to their financials.

Even though plant-floor metrics are key indicators of how a company is performing financially, few manufacturers have successfully linked plant data to their financials, according to a study released by the Manufacturing Enterprise Solutions Association International (MESA).

Only 3% of 135 manufacturers responding say they have very effective links between operating key performance indicators (KPI) and business metrics. This means most companies aren't obtaining accurate depictions of progress and plant contributions, the Chandler, Ariz.-based manufacturing technology organization reports.

"If operations and finance aren't on the same page at the same time, you have a company at cross purposes, and most manufacturers can't afford to be in that position today," adds Julie Fraser, principal of Industry Directions Inc., a market research firm based in Boston.

Other MESA findings show that:

  • Eighty percent of manufacturers that have a metrics framework that links operations to finance, including the leveraging of plant software, realized the most significant improvement against financial and operations metrics.
  • One in three respondents plan to buy plant dashboards in the next year, and 29% plan to buy manufacturing execution systems (MES), making them the top investments planned for the year out of 18 software technologies in the survey.
  • More respondents achieved a return on investment in less than two years on broad functionality software, such as enterprise resource planning (ERP), MES and enterprise asset management, than other applications.

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